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Bob Carey
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  US Stocks Week Ended January 4, 2013
Posted Under: Weekly Market Commentary
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The market continued to rally on Monday as the S&P 500 finished 2012 with a total return of 16%. Headlines centered around the fiscal cliff as the Bush tax cuts were set to expire on 12/31/2012. Fortunately, lawmakers passed a bill late Tuesday night preventing a tax increase on 99% of Americans and spending cuts. However, the deal was not the grand bargain and did little to reduce the current fiscal deficit. The issue will return in February as lawmakers grapple over raising the $16.4 trillion debt limit. Equities posted solid gains on Wednesday after being closed Tuesday as the markets were revalued with sequestration temporarily off the table. The latter half of the week brought additional gains as the US non-manufacturing sector expanded last month. In stock news, Eli Lilly &Co. rose after announcing fiscal 2013 guidance above sell-side estimates on expectations of higher sales from diabetes drugs. However, Family Dollar Stores Inc. fell the most since 2000 after cutting fiscal 2013 guidance as customers are reluctant to spend on higher margin discretionary items. Paragon Shipping Inc. posted solid gains due to an improved outlook for shipping rates and global growth. US Airways Group Inc. shares also jumped after passenger traffic rose 1.8% in December. Looking ahead to next week, Alcoa Inc. will unofficially kick off the 4th quarter earnings season on Tuesday. Additionally, Citigroup Inc. is expected to announce a share buyback if the Federal Reserve approves their plan. Looking longer term, markets will need a solid earnings season as well as another budget deal reached by Washington in February to keep the current market momentum.
Posted on Monday, January 7, 2013 @ 9:03 AM • Post Link Share: 
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These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
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